Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

1065 returns

Partner’s Outside Basis Calculation

This template calculates each partner’s outside basis in the partnership, which equals the partner’s tax basis capital account plus his share of partnership liabilities. The partner’s outside basis is used to determine gain or loss on the disposition of the partnership interest and may limit the current deductibility of partnership losses and deductions.

Entering Information

All of the information needed to produce the computation is entered on the Input worksheet.  The yellow highlighted cells are calculated fields, and no data should be entered in these cells.  Gray cells are not calculated fields, but data should not be entered in these cells.

Enter the following information:

  • Partner’s contributions of:
- Cash
- Property (adjusted basis)
- Services (FMV, if taxed)
  • Purchase price of partnership interest (if purchased from another partner during the year)
  • Donor’s basis (if interest is acquired by gift)
  • FMV of decedent partner’s interest on date of death or alternate valuation date (if acquired by inheritance during the year)
  • Deemed cash contribution equal to partner’s assumption of a share of partnership liabilities
  • Partner’s distributive share of income:
- Ordinary income
- Capital income and IRC Sec. 1231 income
- Tax-exempt income
- Gain recognized on a contribution to an investment company
- Gain recognized under IRC Sec. 704(c)(1)(B)
- Gain recognized under IRC Sec. 737
- Gain recognized under IRC Sec. 731
  • Partner’s share of “excess” depletion
  • Partner’s distributions of:
- Cash
- Property (adjusted basis as determined in the hands of the distributee)
  • Decrease in share of partnership liabilities
  • Share of partnership taxable losses, including:
- Deductions limited by at-risk rules
- Deductions limited by passive activity rules
- Disallowed related party losses
- “Excess” Section 179 expense
  • Share of depletion
  • Share of nondeductible expenses not chargeable to capital account:
- Expenses related to tax-exempt income
- Partner life insurance premiums [net of increase in cash surrender value (CSV)]
- Political contributions
- Disallowed meal and entertainment expenses
  • Other nondeductible expenses